Panic and fear are part of the market cycles, although much less pleasurable than optimism and euphoria. Focusing on which way the markets are heading is an exercise in frustration, since the experts are always divided on market direction.

Wiiken & Gorman suggests that now is the time to look panic in the eye and remind yourself that you have a plan. Your asset allocation is designed to fit your risk tolerance and offers a course of action. As certain investments get hammered (recently real estate and emerging markets), don’t flee from them in fear. Instead, reassess your target allocations. If you have fallen low in some categories, now is the time to buy on sale. Use the profits from the other investments, like bonds, to go shopping. 

As Jonathan Clements said in his Wall Street Journal column, Getting Going, “…rebalancing forces you to grit your teeth and invest more in funds that are suffering while easing up on those that have fared well. Result: You buy low and sell high, turning the market’s mayhem into a money-making opportunity.”

Please call or e-mail us if you have questions about your investing strategy. We advise you to stick to our long-term plan of staying diversified and disciplined.

Lenders become more cautious when they project a weak housing market, a slowing economy or the threat of rising interest rates. Many lenders are starting to apply stricter credit standards.

Credit card companies are also raising their fees and interest rates. In May Consumer Action announced that the average credit card late fee is $28. Some issuers have recently changed from fixed interest rates to variable ones. Others are charging to transfer credit card balances and offering higher introductory rates, instead of  0%.

At Wiiken & Gorman we pledge to use our expertise to help clients imagine a better financial future and develop a plan to experience more financial security and happiness in their lives.